PDF 原檔：報告_CLSA_鴻海2317_20260812_original.pdf
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原始內容
12 August 2026
Taiwan
Technology
Reuters
2317.TW
Bloomberg
2317 TT
Priced on 12 August 2026
Taiwan Wtd @ 45,518.1
12M hi/lo
NT$309.00/187.50
12M price target
NT$375.00
±% potential
+39%
Shares in issue
13,863.0m
Free float (est.)
85.8%
Market cap
US$116.2bn
3M ADV
US$598.8m
Foreign s'holding
41.0%
Major shareholders
Terry Gou 12.4% Vanguard Group 4.2%
SinoPac analysts:
Sam Kao, SinoPac sam.kao@cl-sec.com
+886 223 268164
Stock performance (%)
| 1M | 3M | 12M | |
|---|---|---|---|
| Absolute | 10.7 | 4.4 | 32.8 |
| Relative | 11.3 | (3.3) | (28.9) |
| Abs (US$) | 10.3 | 2.1 | 23.3 |
Source: Bloomberg
Hon Hai
NT$270.00 - OUTPERFORM
Better setup
Maintain Outperform on stronger cloud demand and market share gain
We believe the Rubin Ultra chip/rack design changes are a positive development for ODM as a volume play, and we now forecast NVL shipments to reach 100k/130k in 2027/28. We think Hon Hai is well set up to outperform the market as it gains further market share in Rubin and new ASIC platforms. And supported by its better automation and vertical integration capabilities, and backed by a stronger balance sheet, dilution (margins and earnings) from the growing AI businesses should be much less than peers. We lift 26-28SP EPS by 2-27%, resulting in a higher TP of NT$375 (previously NT$320). Maintain Outperform.
2Q26 results and 3Q26 outlook
2Q26 operating profit was 19%/18% ahead of our/consensus forecasts driven by better consumer IT demand and margins. GM/OPM of 6%/4% was 0.1ppt/0.5ppt ahead of expectations, with the company attributing the margins strength to better cost control and operating leverage. For 3Q26, Hon Hai guides sales to rise 5-15% QoQ, which is in range with consensus forecasts of high-single-digit QoQ growth.
Ongoing upward revisions to cloud demand
Hon Hai continues to see better full-year growth for its cloud business versus the last earnings meeting in May, and reiterated its previous guidance that AI rack shipments will grow sequentially growth throughout the year. Rubin production is on schedule, with Hon Hai still targeting to expand its market share to 50%, while Blackwell demand also remains resilient. For consumer IT, Hon Hai maintains its full-year guidance on respective segments, despite sales tracking ahead YTD.
Better setup ahead
We now forecast NVL rack shipments to reach 100k/130k in 2027/28 as a result of the Rubin Ultra chip/rack design changes, which we think is a positive development for ODM as a volume play. We believe Hon Hai is well set up to outperform the market as it gains further market share in Rubin and new ASIC platforms. Supported by its better automation and vertical integration capabilities, and backed by a stronger balance sheet, dilution (margins and earnings) from growing AI businesses should be much less than peers will experience.
Earnings revisions and valuation
We lift 26-28SP EPS by 2-27% on a stronger AI rack shipment outlook and Opex control, bringing our TP to NT$375 (from NT$320), still based on a SOTP PE multiple of 14x 27SP EPS (18x/9x for AI/non-AI segments). Maintain Outperform.
| Financials | 28SP | ||||
|---|---|---|---|---|---|
| Year to 31 December Revenue (NT$m) | 24A 6,859,615 | 25A 8,103,105 | 26SP 10,491,579 | 27SP 15,619,783 | 18,776,482 |
| Rev forecast change (%) | - | - | 5.2 | 26.1 | 36.9 |
| Net profit (NT$m) | 152,705 | 189,354 | 252,650 | 382,978 | 448,194 |
| NP forecast change (%) | - | - | 1.9 | 19.7 | 26.5 |
| EPS (NT$) | 10.99 | 13.52 | 17.90 | 27.13 | 31.75 |
| SP/consensus (23) (EPS%) | - | - | 102 | 127 | 127 |
| EPS growth (% YoY) | 7.2 | 23.0 | 32.3 | 51.6 | 17.0 |
| PE (x) | 24.6 | 20.0 | 15.1 | 10.0 | 8.5 |
| Dividend yield (%) | 2.1 | 2.7 | 3.3 | 5.0 | 5.9 |
| ROE (%) | 9.9 | 11.3 | 13.5 | 18.2 | 18.7 |
| Net debt/equity (%) | (0.4) | 11.7 | 15.9 | 26.5 | 30.7 |
Source: SinoPac
Financials at a glance
| Year to 31 December | 2024A | 2025A | 2026SP | (% YoY) | 2027SP | 2028SP |
|---|---|---|---|---|---|---|
| Profit & Loss (NT$m) | ||||||
| Revenue | 6,859,615 | 8,103,105 | 10,491,579 | 29.5 | 15,619,783 | 18,776,482 |
| Cogs (ex-D&A) | (6,342,788) | (7,507,191) | (9,753,409) | (14,657,281) | (17,656,753) | |
| Gross Profit (ex-D&A) | 516,827 | 595,914 | 738,170 | 23.9 | 962,503 | 1,119,729 |
| SG&A and other expenses | (228,339) | (238,938) | (255,814) | (294,187) | (338,315) | |
| Op Ebitda | 288,489 | 356,976 | 482,356 | 35.1 | 668,316 | 781,414 |
| Depreciation/amortisation | (87,882) | (97,753) | (112,736) | (131,184) | (151,214) | |
| Op Ebit | 200,607 | 259,223 | 369,620 | 42.6 | 537,132 | 630,200 |
| Net interest inc/(exp) | 8,781 | (7,087) | (8,504) | (7,087) | (7,087) | |
| Other non-Op items | 2,487 | 41,309 | 10,793 | (73.9) | 14,774 | 14,774 |
| Profit before tax | 211,875 | 293,445 | 371,909 | 26.7 | 544,819 | 637,888 |
| Taxation | (40,196) | (78,410) | (90,608) | (130,757) | (153,093) | |
| Profit after tax | 171,679 | 215,034 | 281,301 | 30.8 | 414,062 | 484,795 |
| Minority interest | (18,974) | (25,681) | (28,651) | (31,085) | (36,600) | |
| Net profit | 152,705 | 189,354 | 252,650 | 33.4 | 382,978 | 448,194 |
| Adjusted profit | 152,705 | 189,354 | 252,650 | 33.4 | 382,978 | 448,194 |
| Cashflow (NT$m) | 2024A | 2025A | 2026SP | (% YoY) | 2027SP | 2028SP |
| Operating profit | 200,607 | 259,223 | 369,620 | 42.6 | 537,132 | 630,200 |
| Depreciation/amortisation | 87,882 | 97,753 | 112,736 | 15.3 | 131,184 | 151,214 |
| Working capital changes | (102,348) | (66,721) | (199,795) | (419,411) | (322,374) | |
| Other items | (20,111) | (63,403) | (101,958) | (136,847) | (160,136) | |
| Net operating cashflow | 166,029 | 226,852 | 180,603 | (20.4) | 112,058 | 298,904 |
| Capital expenditure | (136,339) | (173,763) | (230,000) | (250,000) | (250,000) | |
| Free cashflow | 29,690 | 53,089 | (49,397) | (137,942) | 48,904 | |
| M&A/Others | (163,707) | (130,926) (304,689) | 0 (230,000) | 0 (250,000) | 0 (250,000) | |
| Net investing cashflow Increase in loans | (300,046) (7,143) | 317,976 | 500 | (99.8) | 500 | 500 |
| Dividends | (83,134) | (106,731) | (100,173) | (126,325) | (191,489) | |
| Net equity raised/other | (73,795) | (41,298) | (51,111) | (55,419) | (57,039) | |
| Net financing cashflow | (164,072) | 169,947 | (150,783) | (181,244) | (248,028) | |
| Incr/(decr) in net cash | (298,089) | 92,110 | (200,180) | (319,186) | (199,124) | |
| Exch rate movements | 37,534 | (12,778) | 6,440 | 9,201 | 5,739 | |
| Balance sheet (NT$m) | 2024A | 2026SP | (% YoY) | 2027SP | 2028SP | |
| 937,108 | 2025A | 822,700 | (19.1) | 512,715 | ||
| Cash & equivalents | 1,016,440 | 21.4 | 2,082,638 | 319,330 | ||
| Accounts receivable | 1,197,965 | 1,234,268 | 1,498,797 | 19.4 | 2,712,612 | 2,503,531 3,147,604 |
| Other current assets Fixed assets | 1,215,541 468,838 | 1,677,748 543,393 | 2,003,498 645,416 | 18.8 | 779,712 | 887,396 |
| Investments | 430,283 | 474,917 | 656,410 | 38.2 | 657,685 | 658,115 |
| Intangible assets | 42,437 | 39,697 | 39,697 | 0 | 39,697 | 39,697 |
| Other non-current assets | 102,329 | 118,209 | 86,838 | (26.5) | 86,838 | 86,838 |
| Total assets | 4,394,500 | 5,104,672 | 5,753,355 | 12.7 | 6,871,896 | 7,642,511 |
| Short-term debt | 555,107 | 835,648 | 858,424 | 2.7 | 851,449 | 849,507 |
| Accounts payable | 1,133,052 | 1,331,933 | 1,727,961 | 29.7 | 2,590,058 | 3,118,895 |
| Other current liabs | 398,982 | 438,475 | 401,560 | (8.4) | 413,006 | 417,680 |
| Long-term debt/CBs | 375,469 | 410,879 | 306,086 | (25.5) | 306,086 | 306,086 |
| Provisions/other LT liabs | 80,301 | 116,975 | 308,761 | 164 | 276,104 | 225,504 |
| Shareholder funds | 1,574,590 | 1,783,110 | 1,962,912 | 10.1 | 2,247,541 | 2,537,186 |
| Minorities/other equity | 276,998 | 187,653 | 187,653 | 0 | 187,653 | 187,653 |
| equity | 4,394,500 | 6,871,896 | ||||
| Total liabs & | 5,104,672 | 5,753,355 | 12.7 | 7,642,511 | ||
| Ratio analysis | 2024A | 2025A | 2026SP | (% YoY) | 2027SP | 2028SP |
| Revenue growth (% YoY) | 11.3 | 18.1 | 29.5 | 48.9 | 20.2 | |
| Ebitda margin (%) | 4.2 | 4.4 | 4.6 | 4.3 3.4 | 4.2 3.4 | |
| Ebit margin (%) | 2.9 | 3.2 | 3.5 | |||
| Net profit growth (%) | 7.5 | 24.0 | 33.4 | 51.6 | 17.0 | |
| Op cashflow growth (% YoY) | (62.7) | 36.6 2.1 | (20.4) 2.2 | (38.0) 1.6 | 166.7 1.3 | |
| Capex/sales (%) (%) | 2.0 | 15.9 | ||||
| Net debt/equity (x) | (0.4) | 11.7 | 0.7 | 26.5 1.0 | 30.7 1.1 | |
| Net debt/Ebitda ROE (%) | - 9.9 | 0.6 11.3 | 13.5 | 18.2 | 18.7 | |
| 12.7 | 11.4 | |||||
| ROIC (%) | 14.0 | 16.9 | 16.4 |
Source: SinoPac
Figure 1
| Results review | Results review | Results review | Results review | Results review | Results review | Results review | Results review | Results review | Results review |
|---|---|---|---|---|---|---|---|---|---|
| NT$m | 2Q26 | 1Q26 | QoQ | 2Q25 | YoY | 2Q26SP | Diff w/ SP | 2Q26Cons | Diff w/ Con |
| Sales | 2,525,894 | 2,119,533 | 19% | 1,793,468 | 41% | 2,355,974 | 7% | 2,403,855 | 5% |
| Gross profit | 154,533 | 130,981 | 18% | 113,529 | 36% | 142,270 | 9% | 145,313 | 6% |
| Opex | 59,730 | 55,332 | 8% | 56,933 | 5% | 62,626 | (5%) | 65,156 | (8%) |
| Operating profit | 94,803 | 75,649 | 25% | 56,596 | 68% | 79,644 | 19% | 80,157 | 18% |
| Non-OP | 63 | (1,617) | na | 8,553 | (99%) | 6,385 | (99%) | 4,874 | (99%) |
| Pretax profit | 94,866 | 74,031 | 28% | 65,149 | 46% | 86,028 | 10% | 85,031 | 12% |
| Tax expense | 24,810 | 17,075 | 45% | 15,613 | 59% | 20,647 | 20% | 21,428 | 16% |
| Net profit | 59,974 | 49,919 | 20% | 44,361 | 35% | 59,659 | 1% | 56,855 | 5% |
| EPS (NT$) | 4.27 | 3.56 | 20% | 3.19 | 34% | 4.23 | 1% | 4.13 | 3% |
| Margins | |||||||||
| Gross margin | 6.1% | 6.2% | 6.3% | 6.0% | 6.0% | ||||
| Opex/sales | 2.4% | 2.6% | 3.2% | 2.7% | 2.7% | ||||
| OP margin | 3.8% | 3.6% | 3.2% | 3.4% | 3.3% | ||||
| Non-op/sales | 0.0% | (0.1%) | 0.5% | 0.3% | 0.2% | ||||
| Tax rate | 26.2% | 23.1% | 24.0% | 24.0% | 25.2% | ||||
| Net margin | 2.4% | 2.4% | 2.5% | 2.5% | 2.4% |
Source: SinoPac
Figure 2
| Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L | Quarterly P&L |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (NT$m) | 1Q26 | 2Q26 | 3Q26SP | 4Q26SP | 1Q27SP | 2Q27SP | 3Q27SP | 4Q27SP | 2025 | 2026SP | 2027SP | 2028SP |
| Sales | 2,119,533 | 2,525,894 | 2,769,050 | 3,077,101 | 3,193,413 | 3,778,642 | 4,323,864 | 4,323,864 | 8,103,105 | 10,491,579 | 15,619,783 | 18,776,482 |
| Gross profit | 130,981 | 154,533 | 160,328 | 179,592 | 175,819 | 208,111 | 223,694 | 223,694 | 498,161 | 625,434 | 831,318 | 968,515 |
| Opex | 55,332 | 59,730 | 66,242 | 74,510 | 63,632 | 68,690 | 76,179 | 85,687 | 238,938 | 255,814 | 294,187 | 338,315 |
| Operating profit | 75,649 | 94,803 | 94,086 | 105,082 | 112,187 | 139,421 | 147,516 | 138,008 | 259,223 | 369,620 | 537,132 | 630,200 |
| Non-OP | (1,617) | 63 | 1,922 | 1,922 | 1,922 | 1,922 | 1,922 | 1,922 | 34,222 | 2,289 | 7,687 | 7,687 |
| Pretax profit | 74,031 | 94,866 | 96,007 | 107,004 | 114,109 | 141,343 | 149,437 | 139,930 | 293,445 | 371,909 | 544,819 | 637,888 |
| Net profit | 49,919 | 59,974 | 66,341 | 76,415 | 78,850 | 100,938 | 103,262 | 99,929 | 189,354 | 252,650 | 382,978 | 448,194 |
| EPS (NT$) | 3.56 | 4.25 | 4.70 | 5.41 | 5.59 | 7.15 | 7.31 | 7.08 | 13.61 | 17.92 | 27.13 | 31.75 |
| Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth | Growth |
| Sales QoQ | (19%) | 19% | 10% | 11% | 4% | 18% | 14% | 0% | ||||
| Sales YoY | 29% | 41% | 34% | 18% | 51% | 50% | 56% | 41% | 18% | 29% | 49% | 20% |
| EPS QoQ | 10% | 19% | 11% | 15% | 3% | 28% | 2% | (3%) | ||||
| EPS YoY | 17% | 33% | 13% | 67% | 57% | 68% | 56% | 31% | 24% | 32% | 51% | 17% |
| Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin |
| Gross margin | 6.2% | 6.1% | 5.8% | 5.8% | 5.5% | 5.5% | 5.2% | 5.2% | 6.1% | 6.0% | 5.3% | 5.2% |
| Opex | 2.6% | 2.4% | 2.4% | 2.4% | 2.0% | 1.8% | 1.8% | 2.0% | 2.9% | 2.4% | 1.9% | 1.8% |
| OP margin | 3.6% | 3.8% | 3.4% | 3.4% | 3.5% | 3.7% | 3.4% | 3.2% | 3.2% | 3.5% | 3.4% | 3.4% |
| Non-OP | (0.1%) | 0.0% | 0.1% | 0.1% | 0.1% | 0.1% | 0.0% | 0.0% | 0.4% | 0.0% | 0.0% | 0.0% |
| Net margin | 2.4% | 2.4% | 2.4% | 2.5% | 2.5% | 2.7% | 2.4% | 2.3% | 2.3% | 2.4% | 2.5% | 2.4% |
Source: SinoPac
Figure 3
| Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions | Forecast revisions |
|---|---|---|---|---|---|---|---|---|---|
| 2026SP | 2026SP | 2028SP | 2028SP | 2028SP | 2028SP | ||||
| (NT$m) | old | new | % ch | old | new | % ch | old | new | % ch |
| Revenue | 9,969,686 | 10,491,579 | 5% | 12,389,968 | 15,619,783 | 26% | 13,717,831 | 18,776,482 | 37% |
| Gross profit | 604,786 | 625,434 | 3% | 722,069 | 831,318 | 15% | 800,369 | 968,515 | 21% |
| Opex | 265,108 | 255,814 | (4%) | 291,619 | 294,187 | 1% | 320,781 | 338,315 | 5% |
| Operating profit | 339,677 | 369,620 | 9% | 430,450 | 537,132 | 25% | 479,588 | 630,200 | 31% |
| Pretax profit | 357,214 | 371,909 | 4% | 455,988 | 544,819 | 19% | 505,127 | 637,888 | 26% |
| Tax expense | 85,039 | 90,608 | 7% | 109,437 | 130,757 | 19% | 121,230 | 153,093 | 26% |
| Net profit | 247,883 | 252,650 | 2% | 319,884 | 382,978 | 20% | 354,300 | 448,194 | 27% |
| EPS (NT$) | 17.58 | 17.92 | 2% | 22.66 | 27.13 | 20% | 25.10 | 31.75 | 27% |
| Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin | Margin |
| Gross margin | 6.1% | 6.0% | 5.8% | 5.3% | 5.8% | 5.2% | |||
| Operating margin | 3.4% | 3.5% | 3.5% | 3.4% | 3.5% | 3.4% | |||
| Tax rate | 23.8% | 24.4% | 24.0% | 24.0% | 24.0% | 24.0% | |||
| Net margin | 2.5% | 2.4% | 2.6% | 2.5% | 2.6% | 2.4% |
Source: SinoPac
| Figure 4 | ||||
|---|---|---|---|---|
| Sales mix assumptions | ||||
| Sales (NT$m) | 2025 | 2026SP | 2027SP | 2028SP |
| Smart consumer | 3,063,736 | 3,348,688 | 3,443,687 | 3,481,460 |
| Cloud and Networking | 3,279,888 | 5,390,369 | 10,738,128 | 13,580,123 |
| Computing | 1,230,787 | 1,235,141 | 1,219,199 | 1,193,446 |
| Components and others | 528,693 | 517,382 | 524,039 | 521,452 |
| Total | 8,103,105 | 10,491,579 | 15,619,783 | 18,776,482 |
| YoY | 2025 | 2026SP | 2027SP | 2028SP |
| Smart consumer | (4%) | 9% | 3% | 1% |
| Cloud and Networking | 63% | 64% | 99% | 26% |
| Computing | (1%) | 0% | (1%) | (2%) |
| Components and others | 24% | (2%) | 1% | 0% |
| Total | 18% | 29% | 49% | 20% |
| Sales mix | 2025 | 2026SP | 2027SP | 2028SP |
| Smart consumer | 38% | 32% | 22% | 19% |
| Cloud and Networking | 40% | 51% | 69% | 72% |
| Computing | 15% | 12% | 8% | 6% |
| Components and others | 7% | 5% | 3% | 3% |
| Total | 100% | 100% | 100% | 100% |
Source: SinoPac
Figure 5
| Target price change | Target PE (x) | Valuation period | EPS (NT$) | Target Price (NT$) |
|---|---|---|---|---|
| Old | 14 | 2027SP | 22.7 | 320 |
| New | 14 | 2027SP | 27.1 | 375 |
Source: SinoPac
Figure 7
Forward PE
Source: SinoPac
Source: SinoPac
Investment thesis
We expect Hon Hai's vertical integration capability, liquid cooling offerings and strong balance sheet to help it gain share in AI servers, with NVL rack shipments ramping up in coming quarters. Increasing adoption of in-house components could also result in higher-than-expected margins for AI products next year. We believe Hon Hai will maintain its dominant position, allowing it to capture secular AI infrastructure and application opportunities in the future.
Catalysts
1) Rubin platform ramp-up from 2H26; 2) potential margin upside from rising inhouse component sourcing; 3) market share gain due to its diversified production base.
Valuation details
We use PE as our valuation methodology as we believe the market will primarily focus on the earnings growth outlook, which is better reflected with PE metrics. We use a sum-of-the-parts valuation method to better reflect the intrinsic value across its different key businesses. The stock consistently traded between 9x (-1sd)
Source: SinoPac
and 11x (+1sd) in 2017-23, based on each phase of the industry cycle, before breaking out in 2024 due to its rising AI server exposure. We assign a PE multiple of 14x (9x to its non-AI business (smart consumer, computing, etc, and 18x to its cloud business (lower end of the sector average since 2023 when the AI rerating began).
Investment risks
Downside risks: 1) more production challenges affecting AI rack shipments; 2) design-in delay for future platforms causing shipment delays; 3) global consumer weakness weighing on IT sales.
Detailed financials
Profit & Loss (NT$m)
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Revenue | 6,626,997 | 6,162,221 | 6,859,615 | 8,103,105 | 10,491,579 | 15,619,783 | 18,776,482 |
| Cogs (ex-D&A) | (6,150,451) | (5,689,868) | (6,342,788) | (7,507,191) | (9,753,409) | (14,657,281) | (17,656,753) |
| Gross Profit (ex-D&A) | 476,545 | 472,353 | 516,827 | 595,914 | 738,170 | 962,503 | 1,119,729 |
| Research & development costs | (114,258) | (110,020) | (115,772) | (121,705) | (126,820) | (147,093) | (169,157) |
| Selling & marketing expenses | (30,374) | (24,988) | (25,046) | (27,367) | (33,623) | (40,891) | (47,024) |
| Other SG&A | (81,665) | (86,411) | (87,521) | (89,866) | (95,371) | (106,203) | (122,133) |
| Other Op Expenses ex-D&A | - | - | - | - | 0 | 0 | - |
| Op Ebitda | 250,248 | 250,934 | 288,489 | 356,976 | 482,356 | 668,316 | 781,414 |
| Depreciation/amortisation | (76,460) | (84,406) | (87,882) | (97,753) | (112,736) | (131,184) | (151,214) |
| Op Ebit | 173,788 | 166,528 | 200,607 | 259,223 | 369,620 | 537,132 | 630,200 |
| Interest income | 43,303 | 81,700 | 45,577 | 31,010 | 31,099 | 31,010 | 31,010 |
| Interest expense | (34,736) | (65,543) | (36,795) | (38,096) | (39,603) | (38,096) | (38,096) |
| Net interest inc/(exp) | 8,567 | 16,157 | 8,781 | (7,087) | (8,504) | (7,087) | (7,087) |
| Associates/investments | 6,770 | (7,928) | (9,232) | 31,200 | 10,887 | 8,000 | 8,000 |
| Forex/other income | (5,830) | 11,836 | 4,614 | 6,037 | (4,362) | 0 | 0 |
| Asset sales/other cash items | - | - | - | - | - | - | - |
| Provisions/other non-cash items | 5,714 | 6,516 | 8,578 | 6,089 | 4,281 | 6,774 | 6,774 |
| Asset revaluation/Exceptional items | (1,496) | (884) | (1,474) | (2,018) | (14) | - | - |
| Profit before tax | 187,511 | 192,224 | 211,875 | 293,445 | 371,909 | 544,819 | 637,888 |
| Taxation | (36,440) | (37,435) | (40,196) | (78,410) | (90,608) | (130,757) | (153,093) |
| Profit after tax | 151,072 | 154,789 | 171,679 | 215,034 | 281,301 | 414,062 | 484,795 |
| Preference dividends | - | - | - | - | - | - | - |
| Profit for period | 151,072 | 154,789 | 171,679 | 215,034 | 281,301 | 414,062 | 484,795 |
| Minority interest | (9,589) | (12,691) | (18,974) | (25,681) | (28,651) | (31,085) | (36,600) |
| Net profit | 141,483 | 142,098 | 152,705 | 189,354 | 252,650 | 382,978 | 448,194 |
| Extraordinaries/others | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit avail to ordinary shares | 141,483 | 142,098 | 152,705 | 189,354 | 252,650 | 382,978 | 448,194 |
| Dividends | (79,026) | (80,722) | (83,134) | (106,731) | (100,173) | (126,325) | (191,489) |
| Retained profit | 62,457 | 61,377 | 69,571 | 82,623 | 152,477 | 256,653 | 256,705 |
| Adjusted profit | 141,483 | 142,098 | 152,705 | 189,354 | 252,650 | 382,978 | 448,194 |
| EPS (NT$) | 10.2 | 10.3 | 11.0 | 13.5 | 17.9 | 27.1 | 31.7 |
| Adj EPS [pre excep] (NT$) | 10.2 | 10.3 | 11.0 | 13.5 | 17.9 | 27.1 | 31.7 |
| Core EPS (NT$) | 10.2 | 10.3 | 11.0 | 13.5 | 17.9 | 27.1 | 31.7 |
| DPS (NT$) | 5.3 | 5.4 | 5.8 | 7.2 | 9.0 | 13.6 | 15.9 |
Profit & loss ratios
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Growth (%) | |||||||
| Revenue growth (% YoY) | 10.6 | (7.0) | 11.3 | 18.1 | 29.5 | 48.9 | 20.2 |
| Ebitda growth (% YoY) | 11.5 | 0.3 | 15.0 | 23.7 | 35.1 | 38.6 | 16.9 |
| Ebit growth (% YoY) | 16.7 | (4.2) | 20.5 | 29.2 | 42.6 | 45.3 | 17.3 |
| Net profit growth (%) | 1.6 | 0.4 | 7.5 | 24.0 | 33.4 | 51.6 | 17.0 |
| EPS growth (% YoY) | 1.6 | 0.4 | 7.2 | 23.0 | 32.3 | 51.6 | 17.0 |
| Adj EPS growth (% YoY) | 1.6 | 0.4 | 7.2 | 23.0 | 32.3 | 51.6 | 17.0 |
| DPS growth (% YoY) | 1.9 | 1.9 | 7.4 | 24.1 | 24.4 | 51.4 | 17.0 |
| Core EPS growth (% YoY) | 1.6 | 0.4 | 7.2 | 23.0 | 32.3 | 51.6 | 17.0 |
| Margins (%) | |||||||
| Gross margin (%) | 7.2 | 7.7 | 7.5 | 7.4 | 7.0 | 6.2 | 6.0 |
| Ebitda margin (%) | 3.8 | 4.1 | 4.2 | 4.4 | 4.6 | 4.3 | 4.2 |
| Ebit margin (%) | 2.6 | 2.7 | 2.9 | 3.2 | 3.5 | 3.4 | 3.4 |
| Net profit margin (%) | 2.1 | 2.3 | 2.2 | 2.3 | 2.4 | 2.5 | 2.4 |
| Core profit margin | 2.1 | 2.3 | 2.2 | 2.3 | 2.4 | 2.5 | 2.4 |
| Op cashflow margin | 1.7 | 7.2 | 2.4 | 2.8 | 1.7 | 0.7 | 1.6 |
| Returns (%) | |||||||
| ROE (%) | 10.0 | 9.6 | 9.9 | 11.3 | 13.5 | 18.2 | 18.7 |
| ROA (%) | 3.5 | 3.3 | 3.9 | 4.0 | 5.1 | 6.5 | 6.6 |
| ROIC (%) | 13.0 | 12.1 | 12.7 | 11.4 | 14.0 | 16.9 | 16.4 |
| ROCE (%) | 12.0 | 11.4 | 12.5 | 13.0 | 15.9 | 19.3 | 19.0 |
| Other key ratios (%) | |||||||
| Effective tax rate (%) | 19.4 | 19.5 | 19.0 | 26.7 | 24.4 | 24.0 | 24.0 |
| Ebitda/net int exp (x) | - | - | - | 50.4 | 56.7 | 94.3 | 110.3 |
| Exceptional or extraord. inc/PBT (%) | - | - | - | - | - | - | - |
| Dividend payout (%) | 51.9 | 52.7 | 52.8 | 53.2 | 50.1 | 50.0 | 50.0 |
Source: SinoPac
Balance sheet (NT$m)
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Cash & equivalents | 1,062,326 | 1,197,663 | 937,108 | 1,016,440 | 822,700 | 512,715 | 319,330 |
| Accounts receivable | 1,156,412 | 936,825 | 1,197,965 | 1,234,268 | 1,498,797 | 2,082,638 | 2,503,531 |
| Inventories | 939,022 | 730,765 | 835,016 | 1,095,574 | 1,421,325 | 2,130,438 | 2,565,430 |
| Other current assets | 25,465 | 154,303 | 380,524 | 582,174 | 582,174 | 582,174 | 582,174 |
| Current assets | 3,183,225 | 3,019,557 | 3,350,613 | 3,928,456 | 4,324,995 | 5,307,965 | 5,970,464 |
| Fixed assets | 362,405 | 393,967 | 468,838 | 543,393 | 645,416 | 779,712 | 887,396 |
| Investments | 456,586 | 413,798 | 430,283 | 474,917 | 656,410 | 657,685 | 658,115 |
| Goodwill | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other intangible assets | 46,660 | 39,601 | 42,437 | 39,697 | 39,697 | 39,697 | 39,697 |
| Other non-current assets | 85,098 | 72,866 | 102,329 | 118,209 | 86,838 | 86,838 | 86,838 |
| Total assets | 4,133,974 | 3,939,789 | 4,394,500 | 5,104,672 | 5,753,355 | 6,871,896 | 7,642,511 |
| Short term loans/OD | 615,703 | 587,665 | 555,107 | 835,648 | 858,424 | 851,449 | 849,507 |
| Accounts payable | 1,068,941 | 893,119 | 1,133,052 | 1,331,933 | 1,727,961 | 2,590,058 | 3,118,895 |
| Accrued expenses | - | - | - | - | - | - | - |
| Taxes payable | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other current liabs | 397,678 | 367,222 | 398,982 | 438,475 | 401,560 | 413,006 | 417,680 |
| Current liabilities | 2,082,322 | 1,848,006 | 2,087,142 | 2,606,055 | 2,987,944 | 3,854,512 | 4,386,081 |
| Long-term debt/leases/other | 332,509 | 332,954 | 375,469 | 410,879 | 306,086 | 306,086 | 306,086 |
| Convertible bonds | - | - | - | - | - | - | - |
| Provisions/other LT liabs | 68,612 | 72,586 | 80,301 | 116,975 | 308,761 | 276,104 | 225,504 |
| Total liabilities | 2,483,443 | 2,253,545 | 2,542,911 | 3,133,909 | 3,602,791 | 4,436,702 | 4,917,671 |
| Share capital | 138,630 | 138,630 | 138,907 | 139,642 | 141,180 | 141,180 | 141,180 |
| Retained earnings | 925,890 | 987,704 | 1,024,330 | 1,187,661 | 1,340,659 | 1,586,990 | 1,831,817 |
| Reserves/others | 378,688 | 397,858 | 411,352 | 455,807 | 481,072 | 519,370 | 564,189 |
| Shareholder funds | 1,443,208 | 1,524,192 | 1,574,590 | 1,783,110 | 1,962,912 | 2,247,541 | 2,537,186 |
| Minorities/other equity | 207,323 | 162,052 | 276,998 | 187,653 | 187,653 | 187,653 | 187,653 |
| Total equity | 1,650,531 | 1,686,244 | 1,851,588 | 1,970,763 | 2,150,565 | 2,435,194 | 2,724,839 |
| Total liabs & equity | 4,133,974 | 3,939,789 | 4,394,500 | 5,104,672 | 5,753,355 | 6,871,896 | 7,642,511 |
| Total debt | 948,212 | 920,618 | 930,575 | 1,246,526 | 1,164,509 | 1,157,535 | 1,155,592 |
| Net debt | (114,115) | (277,044) | (6,533) | 230,087 | 341,810 | 644,819 | 836,263 |
| Adjusted EV | 3,328,106 | 3,159,884 | 3,504,044 | 3,623,458 | 3,604,415 | 3,897,426 | 4,087,661 |
| BVPS (NT$) | 104.1 | 109.9 | 113.3 | 127.3 | 139.0 | 159.2 | 179.7 |
Balance sheet ratios
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Key ratios | |||||||
| Current ratio (x) | 1.5 | 1.6 | 1.6 | 1.5 | 1.4 | 1.4 | 1.4 |
| Growth in total assets (% YoY) | 5.8 | (4.7) | 11.5 | 16.2 | 12.7 | 19.4 | 11.2 |
| Growth in capital employed (% YoY) | 10.1 | (8.3) | 30.7 | 19.1 | 14.9 | 23.6 | 15.6 |
| Net debt to operating cashflow (x) | - | - | - | 1.0 | 1.9 | 5.8 | 2.8 |
| Gross debt to operating cashflow (x) | 8.6 | 2.1 | 5.6 | 5.5 | 6.4 | 10.3 | 3.9 |
| Gross debt to Ebitda (x) | 3.8 | 3.7 | 3.2 | 3.5 | 2.4 | 1.7 | 1.5 |
| Net debt/Ebitda (x) | - | - | - | 0.6 | 0.7 | 1.0 | 1.1 |
| Gearing | |||||||
| Net debt/equity (%) | (6.9) | (16.4) | (0.4) | 11.7 | 15.9 | 26.5 | 30.7 |
| Gross debt/equity (%) | 57.4 | 54.6 | 50.3 | 63.3 | 54.1 | 47.5 | 42.4 |
| Interest cover (x) | 6.2 | 3.8 | 6.7 | 7.6 | 10.1 | 14.9 | 17.4 |
| Debt cover (x) | 0.1 | 0.5 | 0.2 | 0.2 | 0.2 | 0.1 | 0.3 |
| Net cash per share (NT$) | 8.2 | 20.0 | 0.5 | (16.4) | (24.2) | (45.7) | (59.2) |
| Working capital analysis | |||||||
| Inventory days | 47.2 | 52.8 | 44.4 | 46.3 | 46.6 | 43.8 | 48.1 |
| Debtor days | 65.5 | 62.0 | 56.8 | 54.8 | 47.5 | 41.8 | 44.6 |
| Creditor days | 62.9 | 62.0 | 57.5 | 59.2 | 56.6 | 53.3 | 58.5 |
| Working capital/Sales (%) | 9.9 | 9.1 | 12.9 | 14.1 | 13.1 | 11.5 | 11.3 |
| Capital employed analysis | |||||||
| Sales/Capital employed (%) | 436.2 | 442.4 | 376.9 | 373.8 | 421.3 | 507.5 | 527.6 |
| EV/Capital employed (%) | 219.1 | 226.9 | 192.5 | 167.2 | 144.7 | 126.6 | 114.9 |
| Working capital/Capital employed (%) | 43.1 | 40.3 | 48.4 | 52.7 | 55.1 | 58.2 | 59.4 |
| Fixed capital/Capital employed (%) | 23.9 | 28.3 | 25.8 | 25.1 | 25.9 | 25.3 | 24.9 |
| Other ratios (%) | |||||||
| PB (x) | 2.6 | 2.5 | 2.4 | 2.1 | 1.9 | 1.7 | 1.5 |
| EV/Ebitda (x) | 13.3 | 12.6 | 12.1 | 10.2 | 7.5 | 5.8 | 5.2 |
| EV/OCF (x) | 30.3 | 7.1 | 21.1 | 16.0 | 20.0 | 34.8 | 13.7 |
| EV/FCF (x) | 282.7 | 9.5 | 118.0 | 68.3 | (73.0) | (28.3) | 83.6 |
| EV/Sales (x) | 0.5 | 0.5 | 0.5 | 0.4 | 0.3 | 0.2 | 0.2 |
| Capex/depreciation (%) | 138.7 | 142.0 | 161.7 | 184.5 | 212.6 | 200.9 | 174.7 |
Source: SinoPac
Cashflow (NT$m)
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Operating profit | 173,788 | 166,528 | 200,607 | 259,223 | 369,620 | 537,132 | 630,200 |
| Operating adjustments | (22,716) | (11,739) | (28,928) | (44,188) | (88,319) | (123,069) | (145,406) |
| Depreciation/amortisation | 76,460 | 84,406 | 87,882 | 97,753 | 112,736 | 131,184 | 151,214 |
| Working capital changes | (113,418) | 223,608 | (102,348) | (66,721) | (199,795) | (419,411) | (322,374) |
| Interest paid / other financial expenses | (3,394) | 16,939 | 9,778 | (30,236) | (9,893) | (8,000) | (8,000) |
| Tax paid | - | - | - | - | - | - | - |
| Other non-cash operating items | (1,012) | (34,189) | (961) | 11,022 | (3,746) | (5,777) | (6,730) |
| Net operating cashflow | 109,708 | 445,553 | 166,029 | 226,852 | 180,603 | 112,058 | 298,904 |
| Capital expenditure | (97,935) | (111,745) | (136,339) | (173,763) | (230,000) | (250,000) | (250,000) |
| Free cashflow | 11,773 | 333,808 | 29,690 | 53,089 | (49,397) | (137,942) | 48,904 |
| Acq/inv/disposals | (15,407) | (108,777) | (219,450) | (189,029) | - | - | - |
| Int, invt & associate div | 67,902 | 82,647 | 55,743 | 58,103 | - | - | - |
| Net investing cashflow | (45,440) | (137,874) | (300,046) | (304,689) | (230,000) | (250,000) | (250,000) |
| Increase in loans | 38,469 | (16,342) | (7,143) | 317,976 | 500 | 500 | 500 |
| Dividends | (79,026) | (80,722) | (83,134) | (106,731) | (100,173) | (126,325) | (191,489) |
| Net equity raised/others | (47,315) | (63,575) | (73,795) | (41,298) | (51,111) | (55,419) | (57,039) |
| Net financing cashflow | (87,872) | (160,638) | (164,072) | 169,947 | (150,783) | (181,244) | (248,028) |
| Incr/(decr) in net cash | (23,603) | 147,040 | (298,089) | 92,110 | (200,180) | (319,186) | (199,124) |
| Exch rate movements | 26,512 | (11,704) | 37,534 | (12,778) | 6,440 | 9,201 | 5,739 |
| Opening cash | 1,059,417 | 1,062,326 | 1,197,663 | 937,108 | 1,016,440 | 822,700 | 512,715 |
| Closing cash | 1,062,326 | 1,197,663 | 937,108 | 1,016,440 | 822,700 | 512,715 | 319,330 |
| OCF PS (NT$) | 7.9 | 32.1 | 12.0 | 16.2 | 12.8 | 7.9 | 21.2 |
| FCF PS (NT$) | 0.8 | 24.1 | 2.1 | 3.8 | (3.5) | (9.8) | 3.5 |
Cashflow ratio analysis
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Growth (%) | |||||||
| Op cashflow growth (% YoY) | nm | 306.1 | (62.7) | 36.6 | (20.4) | (38.0) | 166.7 |
| FCF growth (% YoY) | - | 2,735.3 | (91.1) | 78.8 | (193.0) | - | - |
| Capex growth (%) | 6.1 | 14.1 | 22.0 | 27.4 | 32.4 | 8.7 | 0.0 |
| Other key ratios (%) | |||||||
| Capex/sales (%) | 1.5 | 1.8 | 2.0 | 2.1 | 2.2 | 1.6 | 1.3 |
| Capex/op cashflow (%) | 89.3 | 25.1 | 82.1 | 76.6 | 127.4 | 223.1 | 83.6 |
| Operating cashflow payout ratio (%) | 67.0 | 16.8 | 48.5 | 44.4 | 70.0 | 170.9 | 75.0 |
| Cashflow payout ratio (%) | 72.0 | 18.1 | 50.1 | 47.0 | 55.5 | 112.7 | 64.1 |
| Free cashflow payout ratio (%) | 671.2 | 24.2 | 280.0 | 201.0 | - | - | 391.6 |
DuPont analysis
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Ebit margin (%) | 2.6 | 2.7 | 2.9 | 3.2 | 3.5 | 3.4 | 3.4 |
| Asset turnover (x) | 1.6 | 1.5 | 1.6 | 1.7 | 1.9 | 2.5 | 2.6 |
| Interest burden (x) | 1.1 | 1.2 | 1.1 | 1.1 | 1 | 1 | 1 |
| Tax burden (x) | 0.8 | 0.8 | 0.8 | 0.7 | 0.8 | 0.8 | 0.8 |
| Return on assets (%) | 3.5 | 3.3 | 3.9 | 4 | 5.1 | 6.5 | 6.6 |
| Leverage (x) | 2.5 | 2.4 | 2.4 | 2.5 | 2.6 | 2.8 | 2.8 |
| ROE (%) | 10 | 9.6 | 9.9 | 11.3 | 13.5 | 18.2 | 18.7 |
EVA ® analysis
| Year to 31 December | 2022A | 2023A | 2024A | 2025A | 2026SP | 2027SP | 2028SP |
|---|---|---|---|---|---|---|---|
| Ebit adj for tax | 140,015 | 134,098 | 162,549 | 189,957 | 279,570 | 408,220 | 478,952 |
| Average invested capital | 1,079,569 | 1,108,214 | 1,281,530 | 1,668,991 | 1,993,817 | 2,421,579 | 2,913,462 |
| ROIC (%) | 13.0 | 12.1 | 12.7 | 11.4 | 14.0 | 16.9 | 16.4 |
| Cost of equity (%) | 7.3 | 7.3 | 7.3 | 7.3 | 7.3 | 7.3 | 7.3 |
| Cost of debt (adj for tax) | 2.1 | 2.1 | 2.1 | 1.9 | 2.0 | 2.0 | 2.0 |
| Weighted average cost of capital (%) | 5.8 | 5.8 | 5.8 | 5.8 | 5.8 | 5.8 | 5.8 |
| EVA/IC (%) | 7.1 | 6.3 | 6.9 | 5.6 | 8.2 | 11.1 | 10.6 |
| EVA (NT$m) | 77,152 | 69,570 | 87,883 | 93,659 | 164,187 | 268,019 | 310,273 |
Source: SinoPac
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Companies mentioned
Hon Hai (2317 TT - NT$270.00 - OUTPERFORM)